Slack users in the US, UK, Canada, and Australia will soon be able to send each other money via PayPal.

A new bot, PayPal's first, will allow peer-to-peer payments of up to $10,000, according to Venture Beat. The move follows French app Lydia's launch of a similar bot on the rapidly growing collaboration tool last year.

PayPal is trying to capitalize on rising interest for digital peer-to-peer (P2P) payments. As cash and checks become less popular and younger users gain spending power, mobile and digital P2P volume is on the rise.

BI Intelligence estimates that US mobile P2P volume will grow to $336 billion in 2021 from $19 billion in 2015. PayPal is noticing this in its own business, too. In its blog post announcing the bot, the firm noted it processed $41 billion in P2P payments across its platforms in 2015, marking a 42% year-over-year (YoY) uptick. Considering that Venmo alone processed $17.6 billion in 2016, it’s safe to say that number increased even further in 2016. It’s natural for PayPal to pursue lines of business that follow consumer trends.

Chat apps are one way that PayPal could effectively onboard new users and increase engagement overall.

Chat apps capitalize on networks, which is where P2P thrives.When a user makes a payment with an app, they then bring the recipient into that app’s ecosystem, which might incline that recipient to begin using the P2P service or engage with it more frequently. That ultimately benefits the service, because though P2P itself isn’t a huge money driver, it could push customers to other, more lucrative services, like online purchasing, because it gets new users past the barrier of signing up.

Slack, which is used most commonly at work, already regularly engages those networks with its 5 million active users. It’s easy to see potential uses for the bot, like splitting a lunch order or paying into a sports pool, which might lead to fast uptake. In addition, the service’s size could be a focused testing ground for PayPal to develop an offering which it might later develop and expand to more broad-based services, like Messenger or WhatsApp.

Peer-to-peer (P2P) payments, defined as informal payments made from one person to another, have long been a prominent feature of the payments industry. That’s because individuals transfer funds to each other on a regular basis, whether it's to make a recurring payment, reimburse a friend, or split a dinner bill.

Cash and checks have historically dominated the P2P ecosystem, and they’re still a popular tool. But as smartphones become a primary computing device, top digital platforms, like Venmo and Google Wallet, have enabled customers to turn away from cash and make those payments digitally with ease. Over the next few years, though overall P2P spend will remain constant, a shift to mobile payments across the board and increased spending power from the digital-savvy younger generation will cause the mobile P2P industry to skyrocket.

That poses a problem for firms providing these services, though. Historically, most of these players have taken on mobile P2P at a loss because it’s a low-friction way to onboard users and won’t catch on unless it’s free, or largely free, to consumers. But as it becomes more popular and starts to eat into these firms’ traditional streams of revenue, finding ways to monetize is increasingly important. That could mean moving P2P functionality into more profitable environments, leveraging existing networks of friends to encourage spending, or offering value-added services at a nominal fee.

Jaime Toplin, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile P2P payments that examines what’s driving this shift to mobile P2P and explains why companies need to find a way to capitalize on it quickly. It discusses how firms can use the tools they have to gain in the P2P space, details several cases, and evaluates which strategies might be the most effective in monetizing these platforms.

Here are some key takeaways from the report:

Consumers still want mobile P2P services, and they’re turning to them. Individuals pay their peers on a regular basis, and as smartphones are increasingly used as computing devices, these consumers look to such services for fast and easy ways to pay.

Monetizing P2P is more important than ever. Initially, P2P was a valuable onboarding tool for companies, and when it was still a small segment, taking it on at little value or a loss didn’t have major implications. But as volume grows and user bases scale fast, finding ways to monetize quickly should be a priority for firms looking to stay ahead.

New technology could put some apps ahead of their peers. P2P continues to rely on networks, especially for informal, social transactions. But rather than having a large network, it’s becoming important for firms to understand their user bases and the networks within them. This means that chat apps, and leveraging bot and AI technology, may offer a distinct advantage.

In full, the report:

Forecasts the growth of the P2P market, and what portion of that will come from mobile channels, through 2021.

Explains the factors driving that growth and details why it will come from increased usage, not increased spend per user.

Evaluates why mobile P2P isn’t profitable for companies, and details several cases of attempts to monetize.

Assesses which of these strategies could be most successful, and what companies need to leverage to succeed in the space.

Provides context from other markets to explain shifting trends.

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